Obamacare Crippled by States

President Obama boasts that his Obamacare legislation will reduce the number of uninsured by thirty million. But recent actions by the states to reject his proposed expansion of Medicaid auger about a 25 percent reduction in his stated goal.

The Roberts decision affirming the constitutional validity of the individual mandate in Obamacare left the states free to decline the expansion of Medicaid specified in the legislation without facing a penalty. Obamacare mandated — and now suggests — that states cover people for Medicaid up to 133 percent of the poverty level. For a family of one, that comes to $11,490. For a family of two it is $20,628. For three it is $26,000 and for a family of four it would be $31,000.

Now, states are going through the process of deciding if they will expand their Medicaid eligibility as Obama suggests or will opt out as the Supreme Court permits.

Twenty-one states — with almost half of the U.S. population — have either indicated that they will opt out or are considering doing so.

Now, at least twelve states have decided not to participate: Maine, New Jersey, Pennsylvania, South Carolina, Mississippi, Alabama, Louisiana, Georgia, Texas, Oklahoma, South Dakota and Idaho. In addition, nine states are considering opting out: Florida, Wisconsin, Utah, Tennessee, North Carolina, West Virginia, Kansas, Alaska and Indiana.

The combined population of the opt-out states is 86 million (28 percent of the nation) and the population of the undecided states is 57 million (another 18 percent).

But the impact of these opt-outs is even greater than even these numbers would suggest. Of the thirty states (including D.C.) who have indicated they will participate, six already offer Medicaid to those with 133 percent of the poverty level. There would be no increase in coverage for these states under the Obamacare Medicaid provisions. These states have a combined total of fifty million people (16 percent of the country).

So 62 percent of Americans will be unaffected by the Obamacare expansion of Medicaid.

In addition, twelve states who are accepting the new Medicaid eligibility standards already cover 100 percent or more of the poverty level. While they will slightly increase their coverage, it would not be by much. These states have a combined population of 68 million (22 percent of the population).

So here is the extent of the Medicaid expansion, one of the two key elements in Obamacare:

Percent of U.S. Population

–States refusing expansion: 28 percent

–States which may refuse: 18 percent

–States already over 133 percent eligibility: 16 percent

–States already at 100-133 percent eligibility: 22 percent

–Total: 84 percent

So only 16 percent of the U.S. population stands to “benefit” from the increased Medicaid eligibility levels in Obamacare.

Obamacare advertises that it will reduce the number of uninsured by thirty million. About ten million of them were to come from Medicaid expansion. Now it looks like the bulk of this expansion will not happen, potentially lowering the number of uninsured covered to the 22-24 million range, effectively a one-quarter cut in the impact of Obamacare.

The states are rejecting expansion of Medicaid for several reasons:

–While Obamacare promises to reimburse states for the cost of the expansion for three years, it only reimburses 90 percent after that period is over. Since the full implementation of the Obamacare standard would increase Medicaid coverage by about 50 percent, these costs are likely to be severely burdensome.

–Governors are worried that an expansion of Medicaid eligibility will trigger an influx of those now eligible into the Medicaid program. The Kaiser Foundation estimated that half of the growth of Medicaid expected by 2022 would come from those currently eligible. These new Medicaid recipients would be a big burden on states and the feds would only pick up an average of 60 percent of their cost.

But governors are on the lookout and are rapidly mitigating the effects of Obamacare on their Medicaid costs.